On the balance of probabilities if you own a flat in Deal you actually own a long leasehold interest over your property
Leasehold properties in Deal with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Irrespective of whether you are a tenant or a landlord in Deal,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Deal valuers.
Last year Isaac, started to get close to the eighty-year threshold with the lease on his studio apartment in Deal. In buying his property twenty years previously, the length of the lease was of minimal interest. Luckily, it dawned on him that he needed to take steps soon on a lease extension. Isaac was able to extend his lease just under the wire in May. Isaac and the freeholder via the managing agents subsequently agreed on a premium of £6,000 . If the lease had fallen to less than 80 years, the sum would have escalated by a minimum £950.
Last month we were e-mailed by Mr and Mrs. R Morgan , who owned a basement apartment in Deal in August 2005. The question was if we could estimate the premium would likely be to prolong the lease by ninety years. Comparable homes in Deal with 100 year plus lease were valued about £280,000. The average amount of ground rent was £45 billed yearly. The lease elapsed on 19 September 2095. Taking into account 70 years remaining we estimated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including professional charges.
Mr and Mrs. J Rogers acquired a garden flat in Deal in November 1996. The question was if we could approximate the price would likely be for a ninety year lease extension. Comparable properties in Deal with 100 year plus lease were valued about £223,400. The average amount of ground rent was £60 collected yearly. The lease elapsed in 2084. Having 59 years outstanding we estimated the premium to the landlord for the lease extension to be between £27,600 and £31,800 plus expenses.